I. No employee, director, officer, or agent of the lender, or any other third party

acting as joint venture partner, independent contractor, appraisal management

company, or partner on behalf of the lender, shall influence or attempt to

influence the development, reporting, result, or review of an appraisal through

coercion, extortion, collusion, compensation, instruction, inducement,

intimidation, bribery, or in any other manner including but not limited to:

1) withholding or threatening to withhold timely payment for an appraisal

report;

2) withholding or threatening to withhold future business for an appraiser, or

demoting or terminating or threatening to demote or terminate an

3) expressly or impliedly promising future business, promotions, or increased

compensation for an appraiser;

4) conditioning the ordering of an appraisal report or the payment of an

appraisal fee or salary or bonus on the opinion, conclusion, or valuation to

be reached, or on a preliminary estimate requested from an appraiser;

5) requesting that an appraiser provide an estimated, predetermined, or

desired valuation in an appraisal report, or provide estimated values or

comparable sales at any time prior to the appraiser’s completion of an

appraisal report;

6) providing to an appraiser an anticipated, estimated, encouraged, or desired

value for a subject property or a proposed or target amount to be loaned to

the borrower, except that a copy of the sales contract for purchase

transactions may be provided;

7) providing to an appraiser, appraisal management company, or any entity

or person related to the appraiser or appraisal management company, stock

or other financial or non-financial benefits;

8) allowing the removal of an appraiser from a list of qualified appraisers

used by any entity, without prior written notice to such appraiser, which

notice shall include written evidence of the appraiser’s illegal conduct, a

violation of the Uniform Standards of Professional Appraisal Practice

otherwise improper or unprofessional behavior;

9) ordering, obtaining, using, or paying for a second or subsequent appraisal

or automated valuation model in connection with a mortgage financing

transaction unless there is a reasonable basis to believe that the initial

appraisal was flawed or tainted and such basis is clearly and appropriately

noted in the loan file, or unless such appraisal or automated valuation

model is done pursuant to a bona fide pre- or post-funding appraisal

review or quality control process; or

10) any other act or practice that impairs or attempts to impair an appraiser’s

independence, objectivity, or impartiality.

Nothing in this section shall be construed as prohibiting the lender (or any third

party acting on behalf of the lender) from requesting that an appraiser (i) provide

additional information or explanation about the basis for a valuation, or (ii)

correct objective factual errors in an appraisal report.

II. The lender shall ensure that the borrower is provided, free of charge, a copy of

any appraisal report concerning the borrower’s subject property immediately upon

completion, and in any event no less than three days prior to the closing of the

loan. The borrower may waive this three-day requirement. The lender may

require the borrower to reimburse the lender for the cost of the appraisal.

III. The lender or any third-party specifically authorized by the lender (including, but

not limited to, appraisal management companies and correspondent lenders) shall

be responsible for selecting, retaining, and providing for payment of all

compensation to the appraiser. The lender will not accept any appraisal report

completed by an appraiser selected, retained, or compensated in any manner by

any other third-party (including mortgage brokers and real estate agents).

IV. All members of the lender’s loan production staff, as well as any person (i) who is

compensated on a commission basis upon the successful completion of a loan or

(ii) who reports, ultimately, to any officer of the lender other than either the Chief

Compliance Officer, General Counsel, or any officer who is not independent of

the loan production staff and process, shall be forbidden from: (1) selecting,

retaining, recommending, or influencing the selection of any appraiser for a

particular appraisal assignment or for inclusion on a list or panel of appraisers

approved to perform appraisals for the lender; (2) any communications with an

appraiser, including ordering or managing an appraisal assignment; and (3)

working together in the same organizational unit, or being directly supervised by

the same manager, as any person who is involved in the selection, retention,

recommendation of, or communication with any appraiser. If absolute lines of

independence cannot be achieved as a result of the originator’s small size and

limited staff, the lender must be able to clearly demonstrate that it has prudent

safeguards to isolate its collateral evaluation process from influence or

interference from its loan production process.

V. Any employee of the lender (or if the lender retains an appraisal management

company, any employee of that company) tasked with selecting appraisers for an

approved panel or substantive appraisal review must be (1) appropriately trained

and qualified in the area of real estate and appraisals, and (2) in the case of an

employee of the lender, wholly independent of the loan production staff and

process.

VI. In underwriting a loan, the lender shall not utilize any appraisal report prepared by

an appraiser employed by:

(1) the lender;

(2) an affiliate of the lender;

(3) an entity that is owned, in whole or in part, by the lender;

(4) an entity that owns, in whole or in part, the lender

(5) a real estate "settlement services" provider, as that term is defined in the Real

Estate Settlement Procedures Act, 12 U.S.C.§ 2601 et seq.;

(6) an entity that is owned, in whole or in part, by a "settlement services"

provider.

The lender also shall not use any appraisal report obtained by or through an

appraisal management company that is owned by the lender or an affiliate of the

lender, provided that the foregoing prohibitions do not apply where the lender has

an ownership interest in the appraisal management company of 20% or less and

where (i) the lender has no involvement in the day-to-day business operations of

the appraisal management company, (ii) the appraisal management company is

operated independently, and (iii) the lender plays no role in the selection of

individual appraisers or any panel of approved appraisers used by the appraisal

management company.

Notwithstanding these prohibitions, the lender may use in-house staff appraisers

to (i) order appraisals, (ii) conduct appraisal reviews or other quality control,

whether pre-funding or post-funding, (iii) develop, deploy, or use internal

automated valuation models, or (iv) prepare appraisals in connection with

transactions other than mortgage origination transactions (e.g. loan workouts).

VII. The lender will establish a telephone hotline and an email address to receive any

complaints from appraisers, individuals, or any other entities concerning the

improper influencing or attempted improper influencing of appraisers or the

appraisal process, which hotline and email address shall be attended only by a

member of the office of the General Counsel, Chief Compliance Officer or other

independent officer. In addition: (1) each appraiser now or hereafter on any list of

approved appraisers, or, upon retention by the lender, will be notified, in a

separate document, of the hotline and email address and their purpose; and (2)

each borrower, as part of a cover letter accompanying the provided appraisal, will

be notified of the hotline and email address and their purpose. Within 72 hours of

receiving any complaint, the lender will begin a preliminary investigation of the

complaint and upon completing the inquiry (or, after a period not to exceed 60

days, whichever shall come first) shall notify the Independent Valuation

Protection Institute and any relevant regulatory bodies of any indication of

improper conduct. The name and any identifying information of the person or

entity that has filed such a complaint shall be kept in strictest confidence by the

office of the General Counsel, Chief Compliance Officer or other independent

officer, except as required by law. The lender shall not retaliate, in any manner or

method, against the person or entity which makes such a complaint.

VIII. The lender agrees that it shall quality control test, by use of retroactive or

additional appraisal reports or other appropriate method, of a randomly-selected

10 percent (or other bona fide statistically significant percentage) of the appraisals

or valuations which are used by the lender, including the results of automated

valuation models, broker’s price opinions or "desktop" evaluations. The lender

shall report the results of such quality control testing to the Independent Valuation

Protection Institute and any relevant regulatory bodies.

IX. Any lender who has a reasonable basis to believe an appraiser is violating

applicable laws, or is otherwise engaging in unethical conduct, shall promptly

refer the matter to the Independent Valuation Protection Institute and to the

applicable State appraiser certifying and licensing agency.

X. The lender shall certify, warrant and represent that the appraisal report was

obtained in a manner consistent with this Code of Conduct.

XI. Nothing in this Code shall be construed to establish new requirements or

obligations that (1) require a lender to obtain a property valuation, or to use any

particular method for property valuation (such as an appraisal or automated

valuation model) in connection with any mortgage loan or mortgage financing

transaction, or (2) affect the acceptable scope of work for an appraiser in

connection with a particular assignment.

Note:   An "Appraiser" must be licensed or certified by the state in which the property to